Systemic risk of commodity traders

Thorsten Glück and Zeno Adams

Journal of Economic Dynamics and Control, 2025, vol. 179, issue C

Abstract: We examine the disruptions to global commodity flows following the default of a commodity trading firm. The physical commodity network is operated by a handful of large traders that are responsible for the timely delivery of raw materials and inputs to industrial production. We propose a model to simulate the resilience and response time of the network following a shock. Our results suggest that a number of commodity traders carry significant systemic risk. The forced removal of a trader from the network has considerable implications for the prices and availability of physical commodities over a period up to 12 months.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:179:y:2025:i:c:s0165188925001320

DOI: 10.1016/j.jedc.2025.105166

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